Marriott Waiohai approval shocks neighboring Kiahuna

LIHU’E — The Kaua’i Planning Commission yesterday, much to the chagrin of some Kiahuna Plantation owners and managers, approved permits necessary for Marriott Ownership Resort, Inc. to tear down the Waiohai Hotel on Po’ipu Beach, and build the Marriott Waiohai Beach Club.

The amended conditions as approved call for the Marriott to complete demolition work within one year, and complete all construction within three years of issuance of the building permit.

That will mean a nonstop construction period, instead of an on-and-off construction schedule the Marriott originally proposed.

Yesterday’s decision, with yes votes from Commissioners Bob Kaden, Abby Santos, Dane Oda and Dr. Ramon de la Pena (Chair Gary Baldwin voted against), surprised Jim Hill, Kiahuna manager for Outrigger.

“I’m shocked — because I wasn’t able to talk — and amazed that a big corporation prevailed,” said Hill, who before the meeting had expressed optimism that the commission would stick with its original construction condition of one year for demolition and site preparation, and two years of construction.

“I give Gary Baldwin a lot of credit for sticking by his guns. We’ll lost $5 million over the life of the construction,” Hill said, referring to the rental units in Outrigger’s program alone.

Owners of units who market their units themselves will be impacted as well.

“Is Kiahuna happy,” Oda asked Max Graham, Marriott’s attorney. Graham said he wasn’t sure. He also said that Kiahuna wanted to be compensated for the additional year of construction.

“We will do what we said we would do, and hopefully they’ll be happy,” Graham told the commission.

Hill isn’t so sure.

While Marriott has offered to compensate Kiahuna’s phase five owners the equivalent of 210 room nights at $100 a night for 48 months, or a total of just over $1 million, Hill still wants to talk with Marriott about his proposal for Marriott to make up the difference between what affected units have generated over the past 18 months, say, and what they generate during the construction period’s final two years.

“They’ve now effectively doubled the normal construction time,” said Hill, who earlier thought the commission would not allow that timetable.

“At least it’s not seven years,” but with the original, seven-year, year-on, year-off construction schedule originally proposed by the Marriott, the times construction wasn’t taking place could be times when Kiahuna could recover some of the lost revenues Hill is projecting as a result of the construction.

Yesterday’s decision may also lead to layoffs at Kiahuna, Hill warned.

If he cuts back on 20 percent of Outrigger’s units, due to reduced demand to vacation near a construction zone, he’ll also have to cut back on 20 percent of the workforce as well.

“There’s a number of things that need to be reconciled,” and Hill added he has little faith in Marriott’s willingness to negotiate now that it has the Planning Department permits in hand.

But Graham said his client intends to negotiate with Kiahuna on various issues, including view planes from Kiahuna toward the ocean which will be blocked by the Marriott’s new buildings.

A condition that originally stated that the “applicant shall resolve its view enhancements to mitigate any visual impacts to the adjacent Kiahuna Plantation apartments” was amended to read the “applicant shall resolve its view enhancements to mitigate any adverse impacts to the immediate surroundings.” Only a demolition permit from the county is needed before tear-down work can begin, said Graham.

Marriott will award the demolition contract to the most qualified bidder which is also able to demonstrate the ability to minimize the amount of demolished material that must be taken to the Kekaha Landfill.

But Graham will have to hustle on behalf of his client to get necessary permits to improve a dirt county parking lot between the hotel and Po’ipu Beach Park.

Marriott has pledged up to $800,000 of improvements to the lot, including paving, drainage, landscaping and traffic circulation on the lot, but needs County Council approval of the improvement plan, and a Shoreline Management Area use permit from the Planning Department and Planning Commission, Graham explained.

Rough estimates put the cost of the work at around $600,000, so Marriott has pledged the difference between $800,000 and the actual cost of the work to the county, for use in developing recreation facilities or parks in the Koloa-Po’ipu area, or other uses the county deems appropriate.

“We had hoped to accomplish the rebuild in a more expedient manner, so I encourage Marriott to work closely with the Koloa and Po’ipu communities and the Kiahuna Resort to minimize the impact of the three-year construction period,” said Mayor Maryanne Kusaka.

“I’m also delighted that we were able to negotiate with Marriott to accomplish the development of the neighboring Mano Kalanipo Park,” she said.

“That will be a welcomed gift to all of us.” Also at yesterday’s meeting, the commission approved permits necessary for South Pacific Bistro, Inc. to construct a two-story, 6,400-square-foot restaurant next to Otsuka’s along Kuhio Highway in Kapa’a.

The commission and Planning Department had expressed concerns about parking for the restaurant, which applicant Rich Jasper said could open in about a year.

Those concerns were addressed by having a lot across the highway for overflow parking, and having ample parking on the same side of the highway as the restaurant.

Jasper said the restaurant will depend on drive-by traffic to be successful. Some 20,000 vehicles a day pass by the restaurant location now, he said.